Dole plc

Welcome, everybody, and thank you for taking the time to join our third quarter 2022 Earnings Conference Call. Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Joanne Linden, and our Chief Financial Officer, Jacinta Devine. During this call, we'll be referring to presentation slides and supplemental remarks. And these, along with our earnings release, financial statements, and other related materials, are available on the Investor Relations section of the WPLC website. Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Security of Safe Harbor law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our FDC filings and press releases. Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation to the most comparable GAAP measures. Our financial statements for the third quarter were also filed at the FCC earlier today and contain reported financial information for the quarters ended 30 September 2022 and 30 September 2021, and the nine months ended September 30, 2022 and 2021. Our earnings press release and investor presentation also reference pro forma comparative financial information This pro forma information illustrates DOE PLC's results for the third quarter and first nine months of 2021 as if the merger IPO and refinancing had occurred on January 1, 2020. This is consistent with the pro forma financial information presented in the form F1 filed with the SEC in connection with the IPO. With that, I'm pleased to turn today's call over to Rory.

Thank you, James. Welcome, everybody, and thank you for joining us today. Well, we're very pleased that the group has delivered strong results for the third quarter. On a pro forma comparative basis, excluding the impact of currency translation and net M&A activity, revenue increased by approximately 5% as compared to the third quarter of 2021. Adjusted EBITDA of $73 million was ahead of expectations and significantly ahead of the prior year. The significant increase in adjusted EBITDA was driven by a strong performance in our fresh food segment, offset in part by the ongoing recovery in our vegetables business, and a specific challenge in our diversified America segment in the quarter. Adjusted net income and EPS also increased significantly compared to the prior year, driven by the increase in adjusted EBITDA. In the third quarter, we continue to have a strong focus operationally on cash flow, and we are pleased to announce today a cash dividend for the third quarter of eight cents per share. This continues our commitment to return cash to shareholders. So turning to slide eight for our operational highlights. In our fresh food segment, we delivered a strong result for the quarter. North America and commercial cargo operations continue to perform very well with healthy demand, positive market pricing, and good shipping rates. In Europe, high shipping rates and adverse currency movements continue to impact on performance however we are making good progress in managing these challenges supply and demand dynamics in the banana market overall have been unprecedented in 2022 and this remains a key factor as we work towards the end of this year and continue with negotiations for 2023. Overall, with our diverse sourcing base, our leading customer profile, we believe we're well placed to have a strong finish to 2022 and a positive outlook for 2023 in this division. Our diversified EMEA segment continued to trade well on a like-for-like basis in Q3, despite increasing inflationary pressures in our core markets, again demonstrating the ability to price dynamically and benefit from product and geographic diversity. Our diversified America segment was impacted by a specific issue at the end of the Chilean grape season in North America. Significant supply chain disruptions led to exceptional volume disposals that impacted profitability. The overall scale and range of activity in our diversified segments reduces the impact of the Chile grape issue when we look at our results on a full year basis, demonstrating again the benefit of a wide range of products and geographies. Our third quarter, Performance in fresh vegetables remained disappointing, and while we were making progress on our turnaround plan, it is slower than we would like. Category demand was softer in Q3, and ongoing inflation continues in important cost areas. In addition, we faced higher sourcing costs due to weather-related events in key California and growing regions, which impacted the entire industry. More positively, however, our detailed turnaround plan is beginning to yield benefits. From a volume perspective, we recently achieved a number of important customer wins as we look to build back up our volume base for 2023. In all major areas of operation, we have developed detailed profit improvement plans and we are monitoring these closely. We continue to explore all strategic alternatives for this segment and expect to see a recovery in 2023. With that, I'll hand you over to Jacinta to give the financial review.

Thank you, Rory. Good morning and good afternoon. Please turn to slide 10. As Rory mentioned, we delivered a strong performance for the third quarter when compared to the prior year. Revenue for the third quarter decreased marginally against the pro forma comparative driven by negative FX movements and the impact of M&A in our diversified EMEA segment and lower volumes in our vegetable segment. On a like-for-like basis, revenue increased 5% driven by inflation-justified price increases. Adjusted EBITDA for the third quarter increased 26% to $73 million, with the increase driven by a strong performance in the fresh fruit segment. Similar to Q2, foreign currency translation impacted results by $4 million, and stripping this out, adjusted EBITDA increased 32% on a like-for-like basis. Turning to slide 11. Adjusted net income was 13.5 million for the third quarter, significantly ahead of the prior year. The increase was driven by higher adjusted EBITDA, which offset an increase in interest expense. Adjusted fully diluted EPS for the quarter was 14 cents compared to 7 cents in the prior year and 3 cents on a pro forma comparative basis, again driven by the increase in adjusted EBITDA. I will now provide some more detail on each of the individual segments starting with fresh fruit on slide 13. We continue to see good momentum in this segment with revenue for the third quarter increasing 11.7% compared to the pro forma comparison. The increase was driven by higher worldwide pricing and commercial cargo and higher volumes of bananas in North America. This was partially offset by lower volumes for bananas in Europe and Latin America. It just increased 200% from 17 million to 51 million for the quarter, driven by higher revenue. Moving to diversified fresh produce EMEA on slide 14. As with prior quarters, revenue in this segment continues to be impacted by foreign currency translation. On a like-for-like basis, revenue increased 4% driven by a strong performance across the division and overall higher pricing. Similarly, adjusted EBITDA decreased on a reported basis due to foreign currency translation. However, on a like-for-like basis, adjusted EBITDA increased slightly by 0.1%. Then turning to diversified fresh produce, Americas and rest of the world. Revenue for the third quarter increased 5.8%. continuing the good momentum seen in the first half of the year. The increase was driven by higher overall average selling prices, particularly in North American markets for avocados, potatoes, and onions. Our results in this segment were impacted by a difficult end to the Chilean grape season in North America, leading to a loss in the quarter. Then finally turning to fresh vegetables. Lower volumes contributed to a 5% reduction in revenue for the quarter. The segment continues to recover from the impact of the value-added salad recall and plant suspensions at the outset of the year, as well as lower category demand. Lower revenue along with persistent inflation in input costs and specific industry-wide weather challenges in California growing regions led to an adjusted EBITDA loss of 9 million for the quarter. Now turning to slide 17, capital expenditures for the third quarter were 27 million, and we now have invested 67 million year to date, spread over reinvestments in farms and glasshouses in our growing regions. The acquisition of an additional farm in Peru and efficiencies in logistics, warehousing, and processing closer to the market. We are now expecting capital expenditure of 95 million for the year. a reduction of 15 million from our previous guidance. The reduction follows a reassessment of capital projects within the group. Working capital remains elevated, mainly due to the precautionary measures taken earlier in the year to build up inventories and also due to the inflationary impact of input costs. We expect to see this unwind due to the normal seasonal working capital effects at this time of year. However, we do still see a higher underlying level of working capital this year compared to prior years. Our net leverage at the end of the quarter was 3.4 times. We expect leverage to decrease further in the final quarter of 2022 as seasonal working capital outflows unwind. Turning to slide 18, we also continue to focus on our disappointing share price and believe that our valuable strategic asset base is not being fully recognized To highlight this, we have included a slide in our investor presentation setting out a sum of the parts valuation approach using a two-division structure. The asset division more than covers the total debt, while the operating division currently generates adjusted EBITDA of 230 to 250 million on a debt-free basis after charging a proxy lease payment to service the debt. This is one example of the real value in Dole that we believe is not being reflected in our current share price. Now, I will hand you back to Rory, who will give an update on our full year outlook and closing remarks.